An overwhelming majority of shoppers say that it’s important for them to save money right now (87%), according to first-party Ibotta research.
The top reported reasons to save money are to offset price increases (40%), to feel financially secure (38%), and to simply “get by” (38%).
As the Holiday season approaches, Ibotta surveyed many individuals to gain a clear sense of the current moment.
- 2,500 American shoppers to understand consumer sentiment.
- Nearly 500 professionals (Management to C-Level titles) across CPG, General Merchandise, and Retail verticals to identify strategies and opportunities.
Brand leaders and retail loyalty managers can use these findings to inform their strategies into the Holiday season.
Advertiser economic pressures
Compared to shoppers, advertisers seem slightly less pessimistic. 47% sense that the overall economic conditions are “weak” or “fair.” While a larger portion of advertisers stated “average” (32% compared to 22%, respectively), a mere 3% of advertisers stated “excellent.”
As we learned last year — in research from the data science firm dunnhumby — consumers had a skewed perception of inflation. Consumers believed food at home inflation was 22.8%, nearly 10 points higher than the actual 13.1% reported by the US Bureau of Labor Statistics. Dunnhumby reported in the same study that alongside this misperception, there was a rise of “money-saving behavior,” including shoppers checking prices online before or during shopping (37%, a 6% increase from the previous quarter).
Put another way, marketers should be aware that consumers may feel more immediate and personal economic effects, with longer residual hesitations to opening their wallets. A Wall Street uptick today may not be evidenced by consumer spending habits for months to come.
Sentiments across US shopper landscape
Consumer economic pressures
As previously noted, 87% of shoppers surveyed feel that it’s important to save money.
This is at a time when 76% of shoppers claim the economy has a “direct impact” on their grocery spending habits. How do shoppers feel about the economy?
58% describe the “overall economic conditions in the US” as less than satisfactory (“poor” or “fair”) with only 9% stating “excellent.”
Areas of opportunity
Digital dominates
Given that 68% of shoppers use digital devices to aid their in-store shopping journey, it should come as no surprise that 70% prefer digital offers to paper. 62% of shoppers have either downloaded a cash back app or store app for savings offers or looked for digital coupons. Only 28% have clipped paper coupons.
Furthermore, digital offers across the Ibotta Performance Network average a 24% redemption rate versus 0.28% for free-standing inserts (FSIs), as noted in The End of the FSI?
Among those who used a digital device to aid their shopping journey, a significant portion (44% before the trip, 35% during, and 38% at checkout) were specifically seeking digital offers.
A significant opportunity for brands lies in the fact that digital marketing strategies can have a higher impact on consumer behavior.
Driving new-to-brand purchases
Brands leveraging digital offers are well positioned to deliver price relief that shoppers have come to rely on. 42% of the time a shopper tried a brand for the first time, it happened as a result of a digital offer.
While 76% of shoppers report sticking to brands they like, 75% are willing to try a new brand if it’s offered at a lower price (assuming the quality is equal).
Whether a brand is looking to drive trial or gain new purchasers for an existing product, these findings reveal strong opportunities for realized gains via digital promotional offers.
Driving loyalty and advocacy
62% of shoppers said they were more likely to continue buying from a brand if they received some sort of reward for being a customer. This sentiment was even more prevalent among digital users, with 68% saying that digital offers made them “feel valued as a customer.” This is a crucial insight, given that nearly half (49%) of shoppers make brand choices based on the extent to which they feel appreciated as customers.
These digital offers don’t just incentivize loyalty, they also fuel advocacy. A remarkable 59% of shoppers in the consumer sentiment survey are likely to recommend a brand to others due to the impact of a digital offer.
Takeaways
Looking ahead to the Holiday season, by accurately gauging consumer sentiment and factoring in seasonal purchasing trends, advertisers can intelligently leverage their digital arsenals to gain a competitive edge — while loyalty is up for grabs and share of wallet is a more competitive landscape than ever.
Use the tables below to identify categories that surge in purchase volume during Holiday months.
Brands are well advised to activate ahead of these Q4 spikes and invest in awareness building initiatives such as coordinated promotional campaigns to remain top of mind throughout the successive months.
